Focus enough sunlight on a sheet of paper and you can light a fire. Focus the same sunlight on a solar cell and you can generate plenty of electricity. That strategy for increasing the efficiency of solar power is, as Palo Alto, CA-based startup SolFocus demonstrated last week, one of the hottest trends in alternative energy. SolFocus, which has secured $25 million in venture capital financing to accelerate development of its concentrator photovoltaics, employs mirrors to focus sunlight 500-fold onto high-efficiency solar cells.

Concentrator technology to increase the output of solar power is not new. But thanks to high-efficiency photovoltaics and novel manufacturing techniques that create better solar cells, lenses, and mirrors, concentrator photovoltaics systems are delivering more power at lower cost.

At the same time, double-digit growth in demand for solar power systems is outstripping the ability of manufacturers to keep pace, given a tight supply of silicon for conventional solar cells and the high cost of the equipment needed to produce them (see “Large-Scale, Cheap Solar Electricity”).

The technology has the potential to lower costs because it uses a fraction of the semiconducting materials that convert light into power in photovoltaics. Most of the cost is in the lenses or mirrors to focus the light and tracking equipment to keep the device pointed at the sun – elements that are more susceptible to economies of scale than silicon production. “Coming from the semiconductor industry, I knew we could never scale up the amount of silicon we’d need to make a material dent in world energy demand,” says cofounder and CEO Gary Conley.

SolFocus’ design, for example, uses one-thousandth as much semiconductor material per watt produced as a conventional silicon photovoltaic cell. The technology uses compound photovoltaics such as germanium and gallium arsenide, originally designed for use in satellites, which can capture up to 40 percent of the solar energy hitting them – more than double the efficiency of high-end silicon cells.

But the bulk of the materials reduction comes from the concentrator, which Conley says resembles the headlight in most modern cars. “Put the cell where the light bulb is and you have our design,” says Conley. Mirrors are the key: a primary mirror that focuses sunlight onto a smaller mirror perched above, which, in turn, focuses the light on the solar cell.